The Impact of the Post-LiberalisationGrowth of LCCs on the
Tourism Trends in SpainEugeniAguil -
BelenReyUniversitatdelesIllesBalears
ComplutenseUniversityofMadridJaumeRossell-CatalinaM.Torres*UniversitatdelesIllesBalearsThispaperdescribesthebasiccharacteristicsoflowcostcompanies(LCCs)andtheirexpansioninSpain,oneofthemostpopulartouristdestinationsintheworldaccordingtotheWorldTourismOrganization.Usingademandperspective,theevolutionof
LCCs and the main implications for the tourism marked
between2000and2005areanalysed.TheevidenttendencyofLow-Costcompaniestowardsamarkedgrowthinthenumberofpassengersiscontrastedwiththeevidentstagnationoftraditionalorfullservice
companies. The results of the analysis also show that
highlysignificanttrendsrelatedtothedevelopmentofLCCsincludethegrowinguseoftheInternetasaninformationsearchengineandtool
for booking and paying for tourist services, the substitution
oftraditionalholidaypackages(travelandtransport)fordirectbookingsystemsandareductioninthelengthofstaysatadestination.[JelClassification:L83,L93]1.-IntroductionTheEuropeanAirtransportwascharacteriseduptillthesecondhalfofthe1980sbyratherrestrictedbilateralagreements.
A typical bilateral consisted of market sharing betweenthe two
countries flag carriers, often with capacity control, revenue39* ,
Faculty of Economic Science;
,,,CentredeRecercaEconmica(UIB-SaNostra).poolingandfareagreements(Button,1996).Itisthereforefairtosaythat,fromthe1980sonwards,mostintra-EuropeanairlinemarketswereundermuchmorestringentregulationthanthedomesticandinternationalmarketsservedbyUScarriers.DeregulationbetweenEUmemberstatestookplaceintwomajor
ways: firstly by liberalisation of bilateral between
individualstates.Secondly,theEuropeanUnionbegantodevelopaderegulatoryaviationpolicyinthelate1980s.UnlikethestrictderegulationintheUS,theEuropeanderegulationfollowedamoregradualapproach.Sofar,threemajorsteps,intheformofthewell-knownderegulationpackages,havebeentaken.Thefirststepinthisprocessofgradualliberalisationwasthe1987package,inwhichtheEuropeantransportministersexplicitlyagreedupontheapplicationofthecompetitionarticlesintheTreatyofRometotheairlineindustry.TheEuropeanCommissionhadthepowertograntexemptionstotherules,anditwasclearthatmanyinter-airlineagreementsoncapacity,sharing,tariffsandrevenuepooling
would be illegal without them. The granting of
exemptionstocertainimportantcategoriesofagreements,Button-Swan(1989)reflectthegradualapproachtakenbytheCommissionsoas
to persuade member states to accept progressive future
liberal-isation:allexemptionswereoflimitedduration,andinthesuccessive
packages, the liberalisation measures became more
andmoresignificant.FinallythethirdEUaviationpackageobtainedcommon
airline licensing criteria in all EU countries, open
marketaccessthroughoutEU,(domesticcabotagerestricteduntil1997),andfinallyfreepricing.Theliberalisationofhandlingwasalsoincludedinthelastpackage,withtheaimofreducingthehighcosts
this process involves for airlines (calculated to be about
17%oftheiroperationalcost),Doganis(2001).Fromthenontherebeganagradualincreaseincompetition,which,
in the Spanish case, altered the Spanish distribution of
seatsupply,whichwasinitiallyinIberiaspossession,untilreachingtodayssituationwhereitisdistributedbetweenAirNostrum,AirEuropa,SpanairandIberia.ButperhapsoneofthefactorsaffectingcompetitionmoredramaticallyisthepowerfulentrybyRIVISTA
DI POLITICA ECONOMICA JANUARY-FEBRUARY 200740the low cost carriers
(LCC). Their mode of operating is forcing
thetraditionalcompanies,orfullservicecarriers,toaltertheirbehaviourstrategiesinordertosurvivewithinthisnewmarket.
Withinthiscontext,tourismhasplayedacrucialroleinexplainingtherestructuringofthesector.In2006,Spainreceived58.5millioninternationaltouristswithspendingequivalentto48,181millioneuros,makingittheworldssecondtopdestinationaccordinglytotheWTOdata(WTO,2006).SpainhasbeenoneofEuropesleadinginternationaltouristdestinationssincethesixties,thedecadewheninternationaltourismreallytookoff(atthesametime
that civil aviation was popularized), and it accounts for a
largepart of all tourism from the United Kingdom, Germany and
Francewho travel south during the summer months. In this line,
72.6%
oftouristsinSpainarrivedbyplanein2006,apercentagethathasincreased2.6percentagepointssince2000.ItshouldbenotedthatSpain
has played a pioneering role in coastal tourism, with a
modelthathasbeenimitatedbynumerousdestinationsthroughouttheworld.
It is therefore logical that some of the worlds leading
tourismcompanies(Sol-Meli,Barcel,RIU,etc.)arebasedinSpain.
Then,giventheimportanceofthetouristindustryinSpain,which was
estimated to account for 11% of the GDP according
toTourismSatelliteAccountsfor2004(IET,2006a),theexpansionoftheLCCsandtheirinteractionwithtourismiscrucialfortheSpanishEconomyandmustbejointlyanalyzed.ThispaperdescribesinSection2theevolutionoftheLCCsinSpainaimedatshowingthegrowthofLCCspost-liberalisationandthesubsequentgrowthofsecondaryairports.Section3discussestheimplicationofthegrowthofLCCsontourismtrends.Finally,Section4concludes.2.-EvolutionofLCCsinSpain2.1.TheEuropeanLowCostModelTheappearanceoflowcostcompaniesisinrealityaconsequenceoftheairtransportliberalisationprocessthatbeganTheImpact,etc.
E. AGUIL - B. REY -J.ROSSELL
-C.M.TORRES41intheUnitedStatesinthe1970s.ThefirstAmericanLowCostCompany
was Southwest Airlines (Gillen - Morrison, 2003;
Vowles,2001).ThiscompanycurrentlyhassignificantcontroloftheAmericanmarket,withoperationalcostsbetween50%and70%lowerthantherestoftheAmericancompanies.Itsapproachisbasedonhighfrequenciesandverylowprices,anditdoesnotusetheHubandSpokeSystem.Now,whatisknownasthelowcostcompanymodelhasspreadinparticulartoEurope(withcompanieslikeRyanair,EasyjetandAirBerlin)andtoAsiaandAfrica(AirAsia,VirginBlue,AirArabiaandKulula).
The vigour of the low cost companies is faithfully reflected inthe
increase in their users. Scarcely seven years ago, these
airlinesbarelyrepresented2percentofthenumberofairpassengerstransportedthroughouttheworld,lessthanatenthofthosewhoused
charter flights for their journeys. In 2001, the percentage
roseto7percent.Today,themostreliableestimatestalkofasharecloseto14percent,equivalenttoalmost85millionpassengers.Iftheforecastsaremet,in2010oneoutofeveryfourpassengerswillusethesecompaniestotravel,whichwouldamounttomorethan150millionpeople.AlthoughthenumberofLCCsoperatinginEuropeisincreasingeveryyear,wecanidentifythreecompanieswhichareconsistently
predominant: Ryanair (Ireland), Easyjet (UK) and
AirBerlin(Germany).RyanairbegantooperateinSpaininDecember2002whenitlaunchedtheGerona-Frankfurtroutewithtwoflightsaday,butitsoriginsgobackto1985.TheBritishoperatorEasyJethasnotbeenaroundforsolong.Itsflightsbeganin1995followingtheAmericanmodel,SouthwestAirlines.InSpain,itprovides700weeklyfrequencieson63routes(itoffers210alltold),withmorethan
7.2 million passengers. Finally, there is the German companyAir
Berlin. Based at Palma de Mallorca airport, it offers direct
airconnections to ten Spanish and three Portuguese cities, as well
astoLondon,ZurichandVienna. The general strategic behaviour of LCCs
allows them to
makeimportantsavingsontheircosts.TheirbasicmodelknownasLowCostModelisasfollows:RIVISTA
DI POLITICA ECONOMICA JANUARY-FEBRUARY 2007421. Distribution and
reservations are made entirely via
Internetandwithelectronictickets,themoneyforwhichislostifthejourneyisnotmade.2.Inin-flightservice,nodistinctionismadebetweenpreferentialandtouristclass,thereisnoseatnumbering,nofreecatering
is served, and there are no customer loyalty programmes.The crew
itself is in charge of cleaning the plane. These
operationsamounttoanapproximate6%savingonoperationalcosts(Doganis,2001)3.Flightswithhighfrequenciesandmaximumoccupation,withpercentagesofover80%.4.
Very low fares, which can prove even cheaper if the
journeyisreservedthroughadvancebooking.5.Directroutes,withdistancesnotexceeding800kilometres.6.Choiceofsecondaryoriginanddestinationairports,avoidingproblemsofcongestionandwithplanesonlystayingatairportsforbetween15and20minutes,sothatthefleetandthecrewareinoperativeonthegroundfortheshortestpossibletime.Here,arepresentativeexampleisthatofGeronaairport,whose
use has grown exponentially, since it became Ryanairs
baseofoperations.Otherconsequencesapart,thearrivaloftheIrishairline
led to AENA1investing 10 million euros on remodelling
theTerminalandthecarpark.7. Use of a single type of plane in the
fleets, the Boeing 737
ortheAirbus320,withtheaimofreducingcrewtrainingcostsandensuringahighuseofflighthoursperday:approximatelyeleven.8.Crewswithcompetitivesalariesandhighproductivity.Crewshaveacontinuousdailyschedule.2.2
EvolutionofLCCsinSpain2Fromademandperspective,theannualrateofgrowthoftheTheImpact,etc.
E. AGUIL - B. REY -J.ROSSELL -C.M.TORRES431
AENA:SpanishAirportsandAirNavigation.2 The data source employed
corresponds to the Institute of Tourist Studies (IET),and AENA
(Spanish National Airports and Air Navigation). The LCC lists are
updatedby the IET (Institute for Tourist Studies) every year to
keep up with market changes.number of passengers who arrive in
Spain via LCCs has not
ceasedtogrowsince2000(seeGraph1).Incontrastthenumberofpassengersarrivingwithtraditionalcompanieshasstayedatastandstill,
or has shown a clear downward tendency.
Nevertheless,withinthiswell-definedtrendtowardsgrowthitcanbeobservedthat
the rhythm of growth of LCCs diminishes from 2004 onwards,RIVISTA
DI POLITICA ECONOMICA JANUARY-FEBRUARY 200744In turn, the IET data
operate with are provided by AENA, the Tourist Spending
Survey(EGATUR), drawn up by IET itself, and Spanish Tourism Offices
(OETs). Specifically,a comparison is made between 29 out of the 48
currently existing low cost
Europeancompanies:VirgenExpress(Belgium),SterlingEuropean(Denmark),Ryanair(Ireland),
Myair.com (Italy), Transavia.com (Holland), Easyjet Airline Co-Go
Fly,
Jet2,Flyglobespan,(ChannelExpress,GSM)Mytravellite,Bmibaby,JerseyEuropeanAirlines
(Flybe) , Air Scotland, EU Jet, Thomsonfly.com (United Kingdom),
Air
Berlin,DeutscheBa,GermanwingsandHapaglloyd(Germany),EasyjetSwitzerland,FlyBabooandHelvetic(Switzerland),NorwegianAirShuttle(Norway),Flyniki(Austria),
Sky Europe (Slovakia), Smart Wings (Czech Republic), Wizz Air
(Hungary),BlueAir(Rumania),Vueling(Spain)andSnowflakeandFlynordic.com(Sweden).GRAPH
1INTERNATIONALPASSENGERSARRIVINGINSPAIN,LCCS VERSUS
TRADITIONAL05,000,00010,000,00015,000,00020,000,00025,000,00030,000,00035,000,00040,000,0002000
2001 2002 2003 2004 2005Low CostFull Service
Carriers+1.1%+30.8%-3.1% -0.8%
-1.7%-0.1%+22.1%+30.9%+64.1%+47.6%Source:OwnworkusingIETandAENAdata.although
their rates of variation continue to reach really
importantmagnitudes(47.6%and30.8%in2004and2005,respectively).Ofthe29lowcostcarriersselectedin2005,fiveofthemaccountfor74%ofmarketshare,calculatedasthepercentageofpassengerstransportedbyeachlowcostairlineoverthetotalofpassengers
transported by all the LCCs in 2005. As shown by graph2, of these
five, the three main carriers are Easyjet Airline (21.2%),Ryanair
(20.9%) and Air Berlin (20%), only followed by the
DutchcompanyTransaviaHolland(6.3%)andtheBritishcompanyChannel
Express (5.6%). The remaining 26% is distributed
amongtheother24LCCs.In short, this is a clearly concentrated
market, where the
threebiglowcostcompanieshavegraduallyconsolidatedagainsttherestoftheLCCs,whicharesmaller.However,inrelationto2004thelattercompanieshaveexperiencedimportantpercentagesofgrowth:14.7%,69.9%and18.2%,respectively.Likewise,itmustbenotedthat,oftheremainingsmallerLCCs,twoofthemhavewitnessed
spectacular growth in relation to 2004: the British
EUJet(500.4%)andtheSpanishVueling(394.5%).Ifweconsiderallairlinesasawhole,bothlowcostandTheImpact,etc.
E. AGUIL - B. REY -J.ROSSELL -C.M.TORRES45GRAPH
2MARKETSHAREOFTHEMAINLOWCOSTEUROPEANCOMPANIES2005Easyjet
Airline20%Transavia Holland6%Air
Berlin20%Ryanair21%BmiBaby4%Sterling European Airlines3%Other
companies12%Virgin Express3%Thomsonfly.com2%Channel Express (Jet2 +
FlyGlobespan)6%Vueling
Airlines3%Source:OwnworkusingIETandAENAdata.traditional,thatwereoperatinginSpainin2005(Graph3),itisimportanttonotethatIberiaremainsthelargestoperator,followedbyEasyJet,RyanAirandAirBerlin.Infact,thesethreeairlines
together carried roughly 50% more passengers than
Iberia.AphenomenontobenotedfromtheanalysisofgraphsinvolvingtheLCCsconcernsthedestinationairportsfortheirflights,which,asmentionedinsection2,tendtobesecondaryairports.These,inturn,benefitfromtheoperationsoftheseairlines.Tobespecific,during2005(Graph4),theairportswithRIVISTA
DI POLITICA ECONOMICA JANUARY-FEBRUARY 200746GRAPH
3INTERNATIONALPASSENGERSARRIVINGINSPAINBYAIRLINE(2005)0 1,000 2,000
3,000 4,000 5,000 6,000 7,000IberiaEasyjet Airline Co.LtdRyanair
LtdAir BerlinCondor HugdienstBritannia AirwaysMonarch AirlinesAir
EuropaFirst ChoiceSpanairAir FranceThomas Cook AirlinesMy Travel
AirwaysTransavia Holland BvDeutsche LufthansaChannel ExpressLtu
InternacionalAlitaliaGB
AirwaysSource:OwnworkusingIETandAENAdata.TheImpact,etc. E. AGUIL -
B. REY -J.ROSSELL -C.M.TORRES47GRAPH
4THOUSANDOFPASSENGERSATSPANISHAIRPORTSTRANSPORTEDBYLOWCOSTCOMPANIES-200
0 200 400 600
800IbizaVigoReusSalamancaVitoriaMenorcaPamplonaTenerifeSan
SebastianGran CanariaPalma de
MallorcaLanzaroteAlmeriaFuerteventuraMadridCordobaLa
PalmaMalagaBarcelonaSantiagoA CoruaAlicanteBilbaoAsturiasTenerife
NGranadaSevillaJerezValenciaSantanderValladolidGironaMurciaSource:OwnworkusingIETandAENAdata.thegreatesttrafficvolumefromthesecompanieswereSantander,Murcia,GeronaandValladolid,wherethetraditionalcompaniesscarcelycarriedoutanyoperations.Asaconsequence,onecansaythatthespectaculargrowthinpassengernumbersinthesefourairportsisduetotheoperationsbytheLCCs(seeGraph5).Lastly,
with regard to the countries of origin of LCC
travellersandtheregionsofdestinationweobservethatthemainissuingcountriesaretheUnitedKingdomandIreland,followedbyGermany.
The principal tourist destinations are the Community
ofAndalusia,CataloniaandtheCommunityofValencia.
3.-LCCsandMassTourismTrendsinSpainSpaincurrentlyholdssecondplaceinthetheworldtouristarrivalandtouristexpenditureranks,withamarketshareofnearly7%inbothcases.In2006,therewasaratioof1.25international
tourists by resident, although it is important to
addthattourismisunevenlydistributedbothgeographically,andRIVISTA DI
POLITICA ECONOMICA JANUARY-FEBRUARY 200748GRAPH
5THEGINICOEFFICIENTFORINTERNATIONALARRIVALSTOSPAIN0.150.20.250.30.350.40.451997
1998 1999 2000 2001 2002 2003 2004 2005 2006Total United Kingdom
Germany
Francethroughouttheyear.Twogroupsofislands(theBalearicsandtheCanaries)andthreeMediterraneancoastalregions(Catalonia,ValenciaandAndalusia)accountfor80%ofallinternationaltouristarrivals,whileover45%ofthecountrystouristscomeduringthefourhottestmonthsoftheyear(JunetoSeptember).Inanycase,thewidelyknownSpanishtouristdynamicsforthelastyearscannotbeexplainedwithouttheexpansionoftheLCCsandthespecializationofsomeairportsinthiskindofcarriers.Inthiscontext,fromageographicalpointofview,itcanbeobservedhowtheweightoftheLCCsisclearlyrelatedtotourismdevelopment.Inthisline,theBalearics,theCanaries,Catalonia,ValenciaandAndalusiaaccountedforthe85,7%ofthetotalairtransitoftheLCCswhileintermsofthetransitmadebythetraditionalones,thesamepercentageis68,1%.Meanwhile,theexpansionoftheLCCshashadagreatimpactonthoselittleairportsthathavespecializedtheiractivityinthesecompaniesasit
is shown in Graph 4. On the other hand, it must be
highlightedthattheairportsofGironaandValencia,withapercentageofpassengersinLCCsof63.6%and90.9%respectively,aretwoofthe
most specialized in this kind of traffic as well as airports
withaveryhighannualgrowthduringthelastfiveyears.However there are
different opinions about the convenience ofspecialization in this
kind of passengers. In this line some analystsconsider LCCs as a
way to attract new tourists interested in secondhomes and a way to
reactivate local economies (especially for
thoseairportslocatedinsmallcities).Ontheotherside,itisrelatedtoLCCstouristswithlow-incometouristsand,consequently,lowexpenses.ForthisreasonitisnecessarytoinvestigatewhichthemaintouriststrendsthatcanberelatedtotheexpansionoftheLCCsare.3.1EffectsonTourismoftheExpansionoftheLCCsinSpainWithout
any doubt, one of the most important positive
effectsoftheexpansionofLCCsinSpainhasbeenthemaintenanceofTheImpact,etc.
E. AGUIL - B. REY -J.ROSSELL -C.M.TORRES49a growth rate higher than
the one of other is
Euro-Mediterraneanregionsduringthelastfewyears.Howeverpositiveeffectscanbedetectedtoointheseasonalityproblem.Itisknownthatoneofthe
most common is one of the main setbacks of the warm
regionsofthenorthernhemispheretouristdestinations.InthecaseofinternationaltouristarrivalstoSpain,althoughthelatestreportbytheInstituteofTourismStudies(IET,2006b)insistsonacontinued
seasonal trend, a more detailed analysis by
nationalitiesusingtheGinicoefficient(Graph5)showsaslightreductioninthistrendinrecentyears.Someauthorshaveinterpretedthisreductionasachangeinconsumerhabits,associatedwithhigherincomesandhigherlevelsofwell-being(Rossellet
al.,2004).Inaddition,itcouldbearguedthattheexpansionoftheLCCs,incontrast
with the past, has led tourists to take several rest shorterperiods
throughout the year, instead of a longer one, thus
makingseveralholidaytrips.Thevalidityofthishypothesisissupportedbyoneoftheclearesttrendsinthetouristindustryinrecentyears:areductionintheaveragelengthofstay.TakingaveragehotelstaysasareferencebasedontheSpanishHotelOccupancySurvey,thenumberofovernightstaysbyforeignvisitorstoSpaindroppedfrom
5.3 days in 2000 to 4.5 in 2006. If an analysis of the
evolutionoftheBalearicIslandsismade(oneofthemostrepresentativedestinations,withhistoricdataforcertainvariablesliketheaveragelengthofstay),theaveragenumberofovernightstaysdroppedfrom9.5daysin1992to6.6in2005(Aguilet
al.,2004and2005).TheflexibilityintroducedbytheLCCsandthereductionintheaveragelengthofstayhasclearlyhadanimpactontouristexpenditure,withaprogressivedropintouristspendingperpersoninrealterms.Nonetheless,itshouldalsobenotedthataveragedailyspendingpertouristhasshownaslightincreaseinrecentyears,whichcanmainlybeexplainedbytherepercussionofthecostofthetriponitslowerlength.Thefinalbalanceisanincreaseintotaltouristexpenditure,motivatedbythegrowthintouristsnumbersalbeitatalowerrate.Graph2summarizesthereasonsforthesedynamics.RIVISTA
DI POLITICA ECONOMICA JANUARY-FEBRUARY
200750However,itisnotclearwhateffecttheexpansionofLCCsishavingonthecostoftourismproducts.Itisarguedthatlowcostairlines
are the new substitute for charter airlines (Williams,
2001),whoseprofitmarginswerealreadybeingadjustedasaresultofpressurefromtouroperators.Nonetheless,itseemsclearthatLCCshavegivenusersgreaterflexibility,whichhavemadeconsumersmorepronetotravel.Whateverthecase,thereplacementofcharterflightswithonesoperatedbyLCCsisaffectingthewayinwhichholidaysarebooked,withconsumersmovingawayfromtraditionalpackageholidays(apackagewithoneoverallpricewhoseminimumcomponentsaretransportandaccommodation)
and instead reserving transport,
accommodationandotherservicesonanindividualbasis.DatabytheIEToninternationaltourisminSpainshowthatwhilein200252.6%ofalltouristsdidnotpayforapackageholiday;in2006thecorrespondinggraphwas65.5%.Thetrendisevenmoreacuteinthecountrysmostpopulartouristregions,whereLCCshavepenetrated
the market more forcefully. In the Balearic Islands,
thegraphrosefrom32.5%in2002to37.7%in2005;inCataloniafrom73.6%to78.1%;intheCanariesfrom18.1%to24.2%;inAndalusiafrom61.6%to71.5%;andinValenciafrom64.6%to79.4%.
It is also important to add that these five regions
accountedfor87.8%ofallLCCarrivalstoSpainin2005.LCCs have taken
advantage of Internet in tourism. In this
way,newtechnologiesarealsoplayingadecisiveroleinthischangingscenario,bothinthewaythatinformationissoughtandintheTheImpact,etc.
E. AGUIL - B. REY -J.ROSSELL -C.M.TORRES51GRAPH
6DYNAMICSOFTOURISTEXPENDITUREINSPAINAverage length of stay \
\Average daily expenditure per tourist \Average expenditure per
tourist Number of tourists\\Tourist expenditure \\reservation and
payment of tourism services. According to the
IET(2003),in200223.8%ofalltouriststoSpainconsultedtheInternetwhenseekinginformationaboutthedestinationorotheraspectsofthetrip.Then,11%ofthetouristsreservedatravelservicebyInternetand7.5%ofthempaidfortheservicestheyhadbookedthroughthistradingplatform.Justthreeyearslater(IET,2006b),in2005,thesesamepercentageshadrisento39.4%inthecaseofonlineinformationsearches,27.2%inthecaseofbookingsand23.9%inthecaseofpayment.Inanycase,oneofthepossiblenegativeeffectsattributedtotheLCCsisthepotentialattractionoflowincometourists.However,
it is important to highlight the continued
modernizationandrestructurizationofSpainshotelportfolio.Overthelastfewyears,therehasbeenasignificantimprovementinthestandardofitshotels(Graph3).Togiveanexample,in1999hotelbedsinthreeandfour-starhotels3(thehighestcategory)wereestimatedto
account for a share of about 32.2% of the tourist
accommodat-ionmarket,whilein2005thepercentagehadrisento44.2%.Theconversionandupgradingofthecountryshotelsformpartofapolicy
by different Spanish authorities aimed at differentiating
theholidayproduct.Inspiteofeverything,theshareofhoteltradeinthetotaltradeoftheaccommodationmarketisfalling,eventhoughthenumberoftouristsstayinginhotelshasgoneupbyalmostonemillionoverthelastsixyears.While,intheyear2000,70.8%ofalltouriststoSpainchosetostayatahotelorinsimilaraccommodation
(IET, 2001), in 2005 the corresponding graph was62.9% (IET, 2006b).
This shrinking market share can be
attributedtothegrowthinsecondhomesownedbyforeignresidents,whousethesepropertiesbothforthemselvesandforfriendsandrelatives.Whereastouristsstayinginfreeaccommodation4RIVISTA
DI POLITICA ECONOMICA JANUARY-FEBRUARY 2007523
Thenumberofstarsisawidelyusedmeasureofqualitywhichlargelysummarizes
the standards and services offered by hotels. See, for example,
AGUILE.et AL.(2001);CAP J.et AL. (2007);PAPATHEODOROU
A.(2002a);SINCLAIR T.et AL.(1990)orTHRANE C.(2005).4
Althoughfreeisarelativeconceptinthiscase,thetermtendstobeusedtocovertouristsstayingintheirownsecondhomeandthoseusingthehomeofafriendorrelative.accountedforashareoftheaccommodationmarketof15.5%intheyear2000,in2005thesharehadrisento21.3%.Asaresultofthistransformationexplained,partially,bytheexpansionofLCCs,touristsinSpainhavenowadaysahighleveloffamiliaritywiththeholidayproductand,consequently,showahighrepeatedvisitationrate.Itisstrikingthatin2005only17.3%of
all tourists were on their first visit to Spain, whereas 46.5%
hadvisiteditseventimesormore.Thisindicatoriscrucialinhelpingtoforecastadestinationsfutureevolutionandpossibleexpansionplansfromtheairlinecompanies,sincestudieshaveshowntherehastobeapositiverelationbetweenthelikelihoodofarepeatedvisittoadestinationandthenumberofpriorvisitsatouristhasmade(Court-Lupton,1997;Juaneda,1996;Mazursky,1989;Pe-trick
et al., 2001). Tourist satisfaction also influences the
likelihoodTheImpact,etc. E. AGUIL - B. REY -J.ROSSELL
-C.M.TORRES53GRAPH 7WEIGHTOFTHENUMBEROFBEDS
PERACCOMMODATIONCATEGORY0.0%5.0%10.0%15.0%20.0%25.0%30.0%35.0%40.0%45.0%50.0%Five
Four Three Two One1999
2005Source:InstitutoNacionaldeEstadstica(NationalInstituteofStatistics).ofarepeatedvisit(KozakM.,2001).Inthisrespect,only0.6%ofallinternationaltouristsgaveSpainafailrateasadestinationin2005whenaskedtomakeageneralassessmentofthetriptheyhadmade.4.-ImplicationsfortheSpanishMassTourismSectorTheairpassengerandtourismdynamicshaveevidencedthesuccessoftheintroductionofLCCsinSpain.However,itmustbe
admitted that part of this success could be attributed to
otherfactorslikeinternationalinsecurityelementssuchasconflictsand
terrorism, that have threatened the world tourism during
thelastdecadesbutespeciallytoMediterraneandestinationwhicharecompetitorsofSpain.Anyhow,thequestionthatarisesisifthesetouristzones,beforethegreatexpansionoftheLCCs,aregoingtocomeintoastagnationprocessorwillbefalleninexorablyduetothisfact.Althoughsomeauthorsgoforthedepression
in these destinations (Knowles - Curtis, 1999;
Morgan,1991)theirfutureisnotdeterminedinthiswayiftheyareabletotransformthemselvesaccordinglywiththechangesinthetouristmodel.Changes
in tourism have had their origin in the own
evolutionofthetouristasarecreationalservicesconsumerandofleisurewhen
decides to accomplish a holiday, congresses or even
businesstrips.Thisevolutionhasbeencharacterisedbynewmotivationsof
the tourists whose origins are located in the fact that after
fiftyyearsoftouristdevelopment,tourismhasreachedsufficientmaturityandconsolidationlevelsthatcausetravelerstaketheirowndecisionsmoreindependentlythatintheseventiesortheeighties.
It is also evident that these demand transformations
havetheirorigininthemultipletechnologicalchanges.Inthissensemanyofthesetransformationshavebeenabletobematerializedthanks
to the new technologies and, more precisely, to the
Internet.Whatever the case, mass tourism has been influenced by
variationsinthemotivationsthathaveaffectedtothedecisionmakingprocess
of the tourist consumer. This reality, with the
technologicalRIVISTA DI POLITICA ECONOMICA JANUARY-FEBRUARY
200754changes and the globalization process, has become into new
trendsintouristdemand.Ontheotherhand,itmustbehighlightedthatthehighdynamictechnologicaladvanceshaveledtoanewframeworkintheorganisationformulasofthecompaniesand,consequently,intheproductionprocessesandtheoccupationalrelationships.Allthesefactorshavecontributedtothedesignofsomedifferenttrends
on future demand that can affect to the sun and sand
masstourism.AccordingtoVanhove(2005)twomainchangesmustbeconsidered
in analyzing future tourism demand, and
consequentlyfutureairpassengersflows:achangeinpersonalvaluesandachangeinthelifestyles.Inthisway,first,itisnecessarytotalkaboutchangesinthevaluesrelatedtomorenaturalenvironmentspreservationandthesearchoftheauthenticandrealexperiences.Consumerswishtoexpresstheirindividuality,acircumstancethatimpliesthatproducts
must be adapted to each consumer. In the context of thesun and sand
tourist product, the sun alone is not a guarantee
forasustainableandviabletouristdestination.Thematuretouristdestinationsofsunandbeachshouldrestructureindestinationssun-plusor,inotherwords,sundestinationsthatcanoffersomethingmorethansun.
Concerningtothechangeinthelifestyles,tourismhasbeenaffectedbyfashionsandthequicktransformationsofthesociety.Thishasmotivatedthattouristunderstandstheholidaytripasaneedforenjoyingnewexperiences,maybewithinteractionwithdifferentculturesand,thus,heconsiderstravellingtodifferentdestinationsfarawayfromhervitalenvironment.Ontheotherhand,
the tourist consumption that chooses a traditional
destinat-ionisahybridconsumptionthatalternateshigher-levelexpenseswithotherscharacteristicoflowerpurchasingpowertourismlikeflyingatlowprices.Furthermore,thetouristcanalternatetravelsto
exotic destinations with others more traditional and sure in
thecaseofthefamiliartourism.Thus,manytouristsarestillrequiringdestinationswheresome
certain levels of agglomeration and urban development
exist,maybebecausevisitorswishtoenjoyawidevarietycomple-TheImpact,etc.
E. AGUIL - B. REY -J.ROSSELL
-C.M.TORRES55mentaryoffer,rangingfromtheculturalandmonumentaltoallthe
facilities created for the leisure in the traditional
destinations.Inordertomaintainthiscomplementaryofferaminimumthresholdofvisitorsisneededtomakeprofitablethecompaniesinvolvedinthetransportfromtheorigintothedestination.Consequently,sunandsandmasstourismdestinationslikeSpainshouldbeabletodevelopprivateandpublicpoliciesthatwillhavetofacenewdemandsbasedontheindividuality,flexibility,exigencyofagreateradjustmenttothequality,andthegrowingimportanceofthepreservationofthenaturalenvironment.Tosummarizeinanactualterminology,todaythefordist
mass destinations have the challenge of being adapted
tothenewrequirementsofthetouristthroughaneofordistdevelopmentprocess.5.-ConclusionThisarticlehasofferedadescriptionofthebasiccharacteristicsoflowcostcompanies,arecentphenomenonwhoseimpactontheairtransportmarketinEuropeoverrecentyearshasbeenformidable,usingthecasestudyofSpain,wheretouristflightsareprevalent.Thepresenceofthistypeofairlineis,likewise,bringingaboutimportantchangesinthecompetitivestrategiesofthetraditionalcompaniesaswellassignificanttransformationinthetourismmarket.Inthislinefuturetrendsin
LCCs expansion will be bounded to the evolution of the
tourismmovements.Inthiscontext,despitethenumerousdifferentfactorsthatseemtothreatentourismataworldwidelevel,leadinginternat-ional
bodies insist on presenting the tourist industry as one of
themostdynamicintheworldeconomy(WTTC,2006;WTO,2005).Inadditiontothesharpriseintourism,keymovementsbyinternationaltouristssignalaprocessofmarketdiversification.AlthoughEuropecontinuestobethemainissuingmarketanddestinationforinternationaltourism,increasingnumbersofemerging
destinations are appearing, attracting higher and higherRIVISTA DI
POLITICA ECONOMICA JANUARY-FEBRUARY
200756numbersoftourists,andthemostoptimisticgrowthforecastsforthe
next few years are mainly concentrated in Asia, Africa and
theMiddleEast.However,thereisnoevidenceaboutthefactthattraditionalsunandsandmaturedestinationswillnotbeabletoadjustthemselvesinordertoguaranteeacertaingrowthleveltomiddleandlongterms.Inrecentyears,thetrendinworldtouristexpenditureshowsalowergrowththanthevolumeoftourists(WTO,2006),whichmeans
a drop in average spending per tourist. Some authors
havepointedtotheexpansionofLCCsandthewidespreadformationofalliancesamongbigairlinecompaniesasthepossibledrivingforcesbehindthegrowthinthenumberoftourists,thereductionin
the cost of transport and the resulting drop in average spendingper
tourist (Costas-Centivany, 1999; Morley, 2003;
Papatheodorou,2002b).Duetoitsrelativeimportanceinworldtourism,toitstouristindustryslonghistoryandtoitsrecentexpansionofLCCs,Spainis
a good case study to use in analyses of trends that affect
leisure,recreationalandholidaytourismattraditionalsunandsanddestinations.OneinitialanalysisseemstopointtoachangeinEuropeanconsumerspreferences,withthempreferringtotakeanumber
of holidays throughout the year instead of just one in
thesummermonths,probablyrelatedtotheflexibilityintroducedbytheLCCs.Thiswouldexplainthereducedseasonalitythathasbeenobservedinrecentyearsandthereductionintheaveragelengthofstaybytourists.Newtechnologiesareplayingadecisiveroleinchangingconsumerhabits,inthewaythattheyseekinformationaboutdestinations
and reserve and pay for services. In this context,
LCCsaregrowinginstrength,usingonlinebookingsystemsasaprimemethodofreducingcostsandreplacingthecustomofpackageholidayswiththedirectreservationofindividualservices.Asfortheaccommodationsupply,continuedpublicauthorityeffortscanbeobservedtopromotethemodernizationoftouristaccommodation,leadingtohigher-qualityhotels.Despitethis,thehoteltradehasnotbeenfullyabletobenefitfromthegrowthofthe
sector due to the increasing popularity of second homes
ownedTheImpact,etc. E. AGUIL - B. REY -J.ROSSELL
-C.M.TORRES57byforeignresidents,whicharealsowidelyusedbyfriendsandrelatives.ThisphenomenonhasbenefittoofromtheflexibilityintroducedbytheLCCs.
In a more general sense, the sun and sand mature destinationscould
enjoy from possibilities of growing in terms of
expendituresandtouristrevenuessince,contrarilytosomethinking,thesedestinationscanbeadaptedtothevaluesandlifestylechangesiftheyareabletogenerate,inadditiontocompetitiveaccommodation,
a diversified set tourist services that could
satisfyasegmented,heterogeneousdemandneartheinexhaustibleandpersistentgoodweather,characteristicoftheMediterraneancoastalenvironment.Tosumup,thechallengeoftheMediterraneanandSpanishmaturedestinationsistobecapableofadaptingtothechangesimposed
by the new desires and motivations of the tourists in
thecontextofthenewtechnologiesthathavestimulatedtheabove-mentionedchanges.Thischallengecouldbenotgreaterthanothers
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